What is a canonical tag, and why does it matter?
A line in a page that names which version of that page is the definitive one. It exists because the same content is usually reachable at several addresses, and without a canonical the engine has to guess which one you meant.
What it actually is
Your site almost certainly serves the same page at more than one address — with and without a trailing slash, with tracking parameters appended, through a print view, via a category path and a direct one. To you these are obviously the same page. To a search engine they are separate addresses that happen to contain identical text, which is a very different thing.
Why it matters
Duplicates divide you against yourself. Every link earned by one version supports that address rather than the one you want ranking, so instead of a single strong page you get several weak ones competing. The engine eventually picks a winner on your behalf, and its pick is frequently the ugly parameterised address rather than the clean one you would put on a business card.
What good looks like
Every page naming one definitive address, consistently, and naming itself unless it genuinely is a duplicate of something else. The address it names should be the clean, public version — the one you would want to appear in a search result and the one a person would be happy to share in a message.
Being honest about it
On a small, simple site this rarely causes visible harm and we would not have you lose sleep over it. It becomes serious the moment you have a shop, a filterable listing, campaign tracking on your links, or several ways of reaching the same article — which is most sites that do any marketing at all. The cost is invisible until it is substantial.
Where most sites go wrong
The expensive failure is a canonical inherited from a template that points every page at the homepage, which tells the engine your entire site is one page and quietly removes the rest from consideration. Subtler and more common: a canonical naming an address that redirects somewhere else, or one still pointing at a staging domain after launch. Each of those hands an engine a contradiction, and it resolves it without consulting you.